India and EU Set to Launch 11th Round of Free Trade Agreement Talks Starting Monday
India and the European Union (EU) are set to commence the 11th round of negotiations for a proposed Free Trade Agreement (FTA) starting Monday, with discussions expected to run until May 16 in New Delhi. This round of talks aims to expedite the initial phase of the agreement, which both parties hope to finalize as soon as possible. The negotiations come after a significant pause and are part of a broader strategy to adapt to the evolving global trade landscape.
Negotiation Phases and Objectives
The ongoing negotiations will unfold in two distinct phases. The first phase will focus on areas where both India and the EU have already found common ground. The second phase is anticipated to be completed by the end of this year. This two-phase approach is not new for India; it has been employed in its trade discussions with Australia and is similarly being applied in talks with the United States. Commerce Secretary Sunil Barthwal emphasized the importance of prioritizing core trade issues, stating that addressing less critical matters can be deferred to ensure a quicker resolution of more significant topics. Barthwal recently led a review meeting to assess the progress of these negotiations.
Key Areas of Discussion
During the previous round of negotiations, the focus was on critical issues such as market access for goods and services, investment opportunities, and government procurement processes. The EU is advocating for substantial reductions in tariffs on various products, including automobiles, medical devices, wines, spirits, and poultry. Additionally, the EU seeks to strengthen the intellectual property rights framework within the agreement. If successfully concluded, the FTA could enhance the competitiveness of Indian exports, including ready-made garments, pharmaceuticals, and steel, in the EU market.
Historical Context and Future Prospects
The discussions between India and the EU resumed in June 2022 after an eight-year hiatus, which was primarily due to disagreements over market liberalization. The last significant talks had stalled in 2013. In a recent reaffirmation of commitment, Prime Minister Narendra Modi and the President of the European Commission expressed their goal to finalize the trade agreement by the end of 2025. The FTA negotiations encompass 23 broad areas, including trade in goods and services, investment, and sustainable development, among others.
Current Trade Dynamics
As of the fiscal year 2023-24, India’s bilateral trade in goods with the EU reached approximately USD 137.41 billion, making the EU India’s largest trading partner. Indian exports to the EU totaled USD 75.92 billion, while imports stood at USD 61.48 billion. The EU accounts for about 17% of India’s total exports, while India represents around 9% of total EU exports. Furthermore, the two parties are also negotiating an investment protection agreement and an agreement on geographical indications. In a related development, India and the United Kingdom recently announced the conclusion of their own free trade agreement negotiations.
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